Amazon has purchased Touchco, a start-up that owns technology to super-cheap multi-touch displays. The move could signal Amazon preparing to launch a multi-touch Kindle to compete with the Apple iPad. (Source: Nick Bilton/The New York Times)

Google showed off a video showcasing tablets big and small -- two days before Apple's iPad launch. Amid the Apple-related fuss, the annoucement was overlooked until this week. (Source: Google)

Amazon
is understandably a bit troubled by Apple's entry
into the tablet market. The iPad represents perhaps the
most significant threat to Amazon's e-Book empire yet (Amazon
currently holds around 60 percent of the market).

Apple dealt
an indirect blow to Amazon, striking a deal
with media mogul Rupert Murdoch to sell e-books at a higher
rate. The move gives Murdoch ammo to make similar demands of
Amazon, which current sells best-sellers for $9.99. Despite the
fact that Amazon pays publishers the same wholesale prices as it does
print books and that Amazon actually loses money to provide e-books
cheaply, publishers are looking to force the company to sell them at
higher prices to avoid customers getting used to the notion of cheap
new books.

Amazon is looking to strike back, though, with
the acquisition
of Touchco, a New York startup that began as a research project
at the Media Research Lab at New York University. Touchco
currently only has 6 employees and has not yet delivered a commercial
product, but if it can deliver on its claims it could be an extremely
valuable acquisition to Amazon.

The company uses a technology
known as interpolating force-sensitive resistance. It says it
can deliver completely transparent, touch-sensitive displays at a
cost of under $10/sq. foot. The displays offer complete
multi-touch support and a virtually unlimited number of contact
points.

The technology is significantly cheaper
than Apple's iPad touch technology (if the claims are true).
That means Amazon may soon be able to launch a multi-touch Kindle
variant to compete with the iPad, potentially at a lower cost.
Humorously, the Touchco folks will soon be neighbors to Apple, moving
into Google's Kindle hardware division, Lab126, which is based in
Cupertino, California -- also home to Apple's headquarters.

The
acquisition could mark Amazon's departure from E-Ink technology.
Touchco's demonstrated products work primarily with LCD screens.
And despite the low power consumption and reduced eye-strain, Amazon
may have other reasons to move to LCD screens in the next Kindle as
well. Donald Norman, a professor at Northwestern University
says that E-Ink "is too slow and ponderous" for multimedia
or reference works. He says that Amazon will likely move to
"switch to some other type of display."

The
company actually aired the videos two days before the iPad launch,
but everyone was so caught up in the Apple circus that hardly anyone
took note. The videos show users interacting with tablets large
and small and using advanced multi-touch gestures to perform
functions such as window and stacking.

A Google tablet would
have the advantage of being able to leverage Google's largely stable
of web apps. It could also use Google Books to meet peoples'
e-book needs.

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